Audit report, Dougherty County Board of Education, Albany, Georgia, year ended June 30, 1998

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AUDIT REPORT DOUGHERTY COUNTY BOARD OF EDUCATION
ALBANY, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

DOUGHERTY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXlllBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUPS

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

6

C

COMBINED sTAtEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

9

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN RETAINED EARNINGS

PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND

10

E

STATEMENT OF CASH FLOWS

PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND

11

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

13.

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

28

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

30

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

32

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

34

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

36'

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

37

DOUGHERTY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

EXHIBITS

COMBINING STATEMENTS

M

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

38

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

39

2 SCHEDULE OF STATE REVENUE

42

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

43

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

44

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

45

6

BY PROGRAM

46

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DOUGHERTY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Dougherty County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Dougherty County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Dougherty County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates'made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The General Fixed Assets Account Group reported in the general ledger has not been reconciled to
detailed subsidiary records maintained by the Board. The discrepancies have notbeen identified but are believed to be material to the general purpose financial statements.
98ARL-13AX

* The school activity accounts reported in the general purpose financial statements do not accurately
reflect the revenues, expenditures and changes in fund balances for all school activity accounts. To conform to generally accepted accounting principles, all accounts should be recorded in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion ofsalaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for fmancial statements to be prepared in conformity with generally accepted accounting principles. Such required disclosures include:
o Any significant amount of resources committed to make computer systems and other electronic
equipment year 2000 compliant;
o A general description of the year 2000 issue, including a description of the stages of work in
process or completed as of the end of the reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant.
o The additional stages of work necessary for making the computer systems and other electronic
equipment year 2000 compliant.
Dougherty County Board ofEducation has omitted such disclosures. We do not provide assurance that Dougherty County Board of Education is or will be year 2000 ready, that Dougherty County Board of Education's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Dougherty County Board ofEducation does business will be year 2000 ready.
The aggregate effects on the general purpose financial statements of these variances or omissions have not beendetermined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly. in all material respects, the financial position ofthe Dougherty County Board ofEducation as ofJune 30, 1998, and the results of its operations and the cash flows of its proprietary fund for the year then ended, in conformity with generally accepted accounting principles.
98ARL-13AX

In'accordance with Government Auditing Standards, we have also issued our report dated March 26, ,1999, on our consideration ofthe Dougherty County Board ofEducation's internal control over fmancial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose fmancial statements of the Dougherty County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through M) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits olStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:gp 98ARL-13AX

Russell W. Hinton State Auditor

DOUGHERTY COUNTY BOARD OF EDUCATION

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30,1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Prepaid Items
Inventories Consumable Supplies Food Donated Commodities Purchased Food
General Fixed Assets Land Buildings Equipment
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Bond Debt
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

$ 1,874,865.60 $ 264,387.96 $

1,744.86 $

16,691.55

10,109,272.85

707,672.89

38,304,338.12

4,564,8n.31

784,885.86

1,805,992.84

5,480,225.13

9,874.98

192,704.68

217,713.25

18,888.81
253,451.82 215,048.10

$ 13,179,442.24 $ 3,265,442.42 $ 43?86,308.11 $ 4,591,443.84

The notes to the general purpose financial statements are an integral part of this statement. -2-

EXHIBIT "A"

PROPRIETARY FUND TYPE INTERNAL
SERVICE FUND

FIDUCIARY FUND TYPE AGENCY FUNDS

$

29,159.06 $

421,947.40

1,683,645.17

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS

(Memorandum Only)

JUNE 30,1998

JUNE 30,1997

$ 2,608,796.43 $ 3,504,322.91

55,369,806.34

15,341,621.15

8,080,978.81

2,747,079.80

192,704.68

100,603.85

236,602.06
253,451.82 215,048.10

274,042.99
148,290.11 237,477.33

$ 6,198,305.26 121,042,002.34 24,080,754.79
$

4,591,443.84

6,198,305.26 121,042,002.34
24,080,754.79
4,591,443.84

6,030,715.76 117,274,307.01
22,396,121.89
483,735.00

31.688,556.16

31.688.556.16

1,166,265.00

$ 1,712,804.23 $

421,947.40 $ 151,321,062.39 $ . 36,280,000.00 $ 254,558,450.63 $ 169,704,582.80

-3-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30,1998

LIABILITIES AND FUND EQUITY

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Claims Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others General Obligation Bonds Payable

$

23,939,20 $ 290,080.09

92,220,86

1,217,795,38

5,000,000,00

38,996.02

240,418,03

1,885.00

$ 1,710,833,52
271,326.85

Total Liabilities

$ 5,157,041,08 $ 1,748,293,50 $ 1,982,160.37

FUND EQUITY

Investment in General Fixed Assets

Retained Eamings

Fund Balances

Reserved

For Bus Replacement Funds

$

For Continuation of Federal Programs ..

For Debt Service

For Expired Grant Balances/Questioned Costs

For Flood Recovery

For Inventories

Consumable Supplies

Food

Donated Commodities

Purchased Food

For Purpose of Bond Issue

For SPLOST Projects

For State Capital Outlay Projects

Unreserved

Designated for Self-Insurance

Undesignated

Total Fund Equity

$

155,781.39
$
94,316,40

12,504,60
$

$
200,619.51

217,713.25

18,888,81

253,451,82 215,048,10

34,220,384,97 5,797,618,69 1,585,524.57

1,696,950,01 5,857,640,11

1,017,255.59

0,00

8,022,401,16 $ 1,517,148,92 $ 41,804,147.74 $

4,591,443.84
0.00 4,591,443,84

Total Liabilities and Fund Equity

$ 13,179,442,24 $ 3,265,442.42 $ 43,786,308,11 $ 4,591,443.84

The notes to the general purpose financial statements are an integral part of this statement. -4-

EXHIBITUA"

PROPRIETARY FUND TYPE INTERNAL
SERVICE FUND

FIDUCIARY FUND TYPE AGENCY FUNDS

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS

(Memorandum Only)

JUNE 30,1998

JUNE 30,1997

$

280,181.67

$

421,947.40

$

280,181.67 $

421,947.40

$

$

314,019.29

1,310,016.24

. 5,000,000.00

279,414.05

280,181.67

1,710,833.52

271,326.85

1,885.00

421,947.40

$ 36,280,000.00

36,280,000.00

1,709,860.95 250,651.31
1,112,196.45 5,000,000.00
59,989.38 205,666.99 206,606.10
27,055.40 3,265.00
289,536.72 1,650,000.00

$ 36,280,000.00 $ 45,869,624.02 $ 10,514,828.30

$ 1,432,622.56
0.00 $ 1,432,622.56

$ 151,321,062.39
0.00 $ 151,321,062.39

$ 151,321,062.39 $ 145,701,144.66

1,432,622.56

1,646,n3.53

155;781.39 12,504.60
. 4,591,443.84 94,316.40
200,619.51

54,564.33 483,735.00 112,158.71 1,516,561.90

236,602.06

274,042.99

253,451.82 215,048.10 34,220,384.97 5,797,618.69 1,585,524.57

148,290.11
237,4n.33
1,810,686.75

1,696,950.01 6,874,895.70

1,625,571.98 5,578,747.21

$ 208,688,826.61 $ 159,189,754.50

$ 1,712,804.23 $

421,947.40 $ 151,321,062.39 $ 36,280,000.00 $ 254,558,450.63 $ 169,704,582.80

-5-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAl FUND TYPES YEAR ENDED JUNE 30, 1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess ofRevenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Premium on Bonds Sold Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

GENERAl FUND

SPECIAL REVENUE
FUND

$ 61 ,146,575,22 $ 3,490,756.06

931,010,71

12,248,023.16

25,405,328.69

1,788,725.95

2,200,223,22

$ 89,271,640.57 $ 17,939,002,44

$ 55,639,132.54 $
4,558,150,10 2,497,972,83 2,403,731,16 1,452,551.93 6,008,159.27 1,577,240,58 7,772,794,47
~,743.346,34
1,417,017,64 255,411.79 12,362.75 324,516,31 66,749,29 64,601,78

6,967,522.03
873,123.03 884,879.30
51,307.26 409,431,93
16,545.90
127,945,32 63,246,19
1,114,131.69 6,934,339,41
246,953.10
6,907.10

$ 87,793,738,78 $ 17,696,332.26

$ 1,477,901.79 $

242,670.18

$ $ -397,306.90
$ -397.306,90 $

189,890.75 189,890,75

$ 1,080,594.89 $

432,560,93

6,941,806,27

1,084,587.99

FUND BALANCE JUNE 30

$. 8,022,401.16 $ 1,517,148,92

The notes to the general purpose financial statements are an integral part of this statement. -6-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1998 JUNE 30,1997

$

571,616.96

3,908,832.16

6,425,900.91 $

760,714.83

.$ 11,667,064.86 $

$
4,426,936.20 29,230.32

65,208,948.24 $ 17,087,866.03 36,258,165.80 4,778,894.32

62,746,973.74 17,763,879.47 26,530,318.13 3,624,112.48

4,456,166.52 $ 123,333,874.39 $ 110,665,283.82

$

2,666.70

$ 62,609,321.27 $ 63,113,312.83

627,990.68 292,449.77
25,871.72 54,899.52
3.85
7,723,676.33

5,431,273.13 3,382,852.13 2,455,038.42 2,489,974.54 6,317,154.94 1,603,112.30 7,955,639.31 3,806,592.53 1,417,017.64 1,369,547.33 6,946,702.16
571,469.41 66,749.29
7,795,185.21

4,729,320.05 3,570,487.72 2,435,742.90 2,240,452.63 6,097,723.01 1,440,795.91 8,212,006.34 4,018,558.93 1,466,636.72 1,092,608.62 7,217,026.22
488,867.56 46,272.15
3,518,498.37

$

370,000.00

72,620.00

678.34

370,000.00 72,620.00 678.34

350,000.00 88,830.00 656.85

$ 8,727,558.57 $

443,298.34 $ 114,660,927.95 $ 110,127,796.81

$ 2,939,506.29 $ 4,012,868.18 $ 8,672,946.44 $

537,487.01

$ $ 35,000,000.00
325,518.25 207,416.15
$ 35,532,934.40 $

94,840.66 $

94,840.66

35,000,000.00 325,518.25 397,306.90 $ -397,306.90

94,840.66 $ 35,420,358.91 $

598,520.63 -598,520.63
0.00

$ 38,472,440.69 $ 3,331,707.05

4,107,708.84 $ 44,093,305.35 $

537,487.01

483,735.00

11 ,841,836.31

11,304,349.30

$ 41,804,147.74 $ 4,591,443.84 $ 55,935,141.66 $ 11,841,836.31

-7-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - lNON-GAAP BASIS> GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1998

EXHIBIT"C"

The notes to the general purpose financial statements are an integral part of this statement. -9-

DOUGHERTY COUNTY BOARD OF EDUCATION

. EXHIBIT "0"

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS

PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND

YEAR ENDED JUNE 30, 1998

OPERATING REVENUES Charges for Services
OPERATING EXPENSES Current Support Services Central Support Services Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Total Income (Loss)
RETAINED EARNINGS JULY 1
RETAINED EARNINGS JUNE 30

PROPRIETARY FUND TYPE SELFINSURANCE FUND

TOTALS. (Memorandum Only)
YEAR ENDED
JUNE 30,1998 JUNE 30, 1997

$ 255,950,63 $ 255,950,63 $ 297,047.73

$ 578,049,09 $ 578,049,09 $ 546,521,12 $ -322,098.46 $ -322,098.46 $ -249,473,39

$ 107,947.49 $ 107,947.49 $ 109,121,26

$ -214,150,97 $ -214,150,97 $ -140,352.13

1,646,773,53

1,646,773,53

1,787,125,66

$ 1,432,622,56 $ 1,432,622,56 $ 1,646,773,53

The notes to the general purpose financial statements are an integral part of this statement.
- 10-

DOUGHERTY COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND YEAR ENDED JUNE 30, 1998

EXHIBIT"E"

Cash Flows from Operating Activities: Cash Received from Charges for Services Cash Paid for Administration of Fund Cash Paid for Worker's Compensation Claims
Net Cash Provided (Used) by Operating Activities
Cash Flows from Investing Activities: Interest Received on Investments Cash Received from Redemption of Investment
Net Cash Provided by Investment Activities
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - July 1

PROPRIETARY FUND TYPE SELFINSURANCE FUND

TOTALS (Memorandum Only)
JUNE 30, 1998 JUNE 30, 1997

$ 255,950.63 $ 255,950.63 $ 297,797.73

-103,042.92

-103,042.92

-135,201.97

-368,233.49

-368,233.49

-411,925.16

$ -215,325.78 $ -215,325,78 $ -249,329.40

$

963.14 $

963.14 $

957.13

180,000.00

180,000.00

220,000.00

$ 180,963.14 $ 180,963,14 $ 220,957.13

$

-34,362.64 $

-34,362.64 $

-28,372.27

$ . 63,521.70 $

63,521.70 $

91,893.97

Cash and Cash Equivalents - June 30

$

29,159.06$

29,159.06 $ ===6=3.:=,5=21=.7=0,=

Reconciliation of Operating Income to Net

Cash Provided (Used) by Operating

Activities:

.

Operating Income (Loss)

Decrease in Accounts Receivable

Increase in Claims Payable

Decrease in Prepaid Items

$ -322,098.46 $ -322,098.46 $ -249,473.39 .

750,00

74,514.68

74,514.68

-7,170.01

32,258.00

32,258.00

6,564.00

Net Cash Provided (Used) by Operating Activities

$ -215,325.78 $ -215,325.78 $ -249,329.40

The notes to the general purpose financial statements are an integral part of this statement. - 11 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXlllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Dougherty County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and account groups to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a fmancial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
The school activity accounts reported in the general purpose financial statements do not accurately reflect the revenues, expenditures and changes in fund balances for all school activity accounts. To conform to generally accepted accounting principles, all accounts .should be recorded in the general purpose fmancial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account groups presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceed~ of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for fmancial resources to be used for the acquisition or construction of major capital facilities.

- 13-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEBT SERVICE FUND - the fund used to account for the accumulation of resources for, and the payment of, general long-term principal, interest and paying agent fees.
PROPRIETARY FUND TYPE - the fund used to account for activities ofthe Board similar to those found
in the private sector, where cost recovery and the determination ofnet income is useful or necessary for sound fiscal management. Internal service funds are a type of proprietary fund and are used to account for operations on a cost reimbursement basis that provide services to other funds or programs of the Board.
Self-Insurance Fund - the internal service fund used to account for the Board's Worker's Compensation
risk financing and insurance related activities.
FIDUCIARY FUND TYPE - the funds used to account for assets held by a government unit in a trustee
capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS ACCOUNT GROUP - A financial reporting device used to account for all general fixed assets acquired or constructed for use by the Board.
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.

- 14-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXillBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998 .

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Dougherty County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The proprietary fund budget was prepared and utilized as a management tool to assess the operations ofthe internal service fund. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The -budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,

- 16-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.

Agency funds are purely custodial in nature and do not involve measurement of results of operations.

Governmental funds are accounted for using the modified accrual basis of accounting under which:

Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

Expenditures are generally recognized when the related fund liability is incurred.

A departure from the above definitions is the accounting treatment afforded the final two payments on

General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department

of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of

personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997

and ending in early June 1998. Personnel contracts for this employment period specify that compensation

be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State

grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education

to the Board in the same twelve months. As of June 30, 1998, compensation under these employment

:-. contracts had been earned, but two of tIie twelve monthly payments, due for July and August 1998, had not

been made. Payments for these two months were made and recorded as expenditures by the Board subsequent

to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received

and recorded as revenue in the fiscal year subsequent to June 30~ 1998. Conversely, the similar expenditures

and related 'revenues for contractual-services completed prior to June 30, 1997, were recorded in the year

ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when

available and measUrable and that expenditures be recorded when incurred, rather than when funds are

received or disbursed. .

-

The accrual basis of accounting, as required by generally accepted accounting principles, is utiliied by proprietary funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. -

Agency funds are accounted for using the modified accrual basis of accounting in recogniziD.g assets and liabilities.

- 15 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXIllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.

Agency funds are purely custodial in nature and do not involve measurement ofresults of operations.

Governmental funds are accounted for using the modified accrual basis of accounting under which:

Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

Expenditures are generally recognized when the related fund) liability is incurred.

A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment :-. contracts had been earned, but two oftlie twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related "revenues for contractual-services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. .

The accrual basis of accounting, as required by generally accepted accounting principles, is utiliied by

proprietary funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses

are recorded at the time liabilities are incurred.

,

Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.

- 15 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998 .

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Dougherty County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The proprietary fund budget was prepared and utilized as a management tool to assess the operations ofthe internal service fund. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The -budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This fmal budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized fmancial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,

- 16-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Dougherty County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 20, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Dougherty County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.1% of taxes collected as a fee for tax collection and reJl1its the balance of taxes collected to the Board.

Tax millage rates levied for the 1997 tax year (calendar year) for the Dougherty County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

17.70 mills
---.JQ mills

18.06 mills

- 17 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $10,089,576.42 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection of this tax once an additional $80,386,728.58 has been collected or on September 30,2002 whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (weighted average). The Board uses the consumption method to account for both inventories. Donated food commodities are recorded as an asset and as revenue when received, and
expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when
purchased and expenditures are recorded as the inventory items are used. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
SUPPLIES INVENTORIES Inventories of consumable supplies are reported on the Combined Balance Sheet at cost (weighted average). The Board uses the consumption method to account for the inventory whereby purchases are recorded as an asset when purchased and expenditures are recorded as the inventory items are used. The inventory reported on the balance sheet is equally offset by a reservation of fund balance which indicates that it is not available for discretionary expenditures even though.it is a component of net current assets.
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 1998, are recorded as prepaid items.
GENERAL FIXED ASSETS
General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time ofpurchase. All purchased general fixe.d assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the" assets is not capitalized. Infrastructure assets are not capitalized by the Board.
- 18 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTESTO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The general fixed assets reported in the general ledger have not been reconciled to detailed subsidiary records maintained by the Board. The discrepancies have not been identified but are believed to be material to the general purpose financial statements.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Tenn Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial s.tatements.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obIlgations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Tenn Debt Account Group.
FUND BALANCES RESERVED
Reserves represent those portions of fund equity that are legally segregated for a specific future use.
Reserved for Flood Recovery - This reserve constitutes the unexpended balance of Federal, State and Local Matching Funds designated for flood recovery activities.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions. of expenditures/expenses in the fund that is reimbursed.

- 19-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
. Operating 'transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position,
results of operations or cash flows In conformity with generally accepted accounting principles. Neither are
such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists ofanyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, .
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

- 20-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $7,461,831.61. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities

held by the Board or by the Board's agent in the Board's name.

.

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust

department or agent in the Board's name.

Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with

securities held by the pledging financial institution, or by its trust department or agent but

not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 595,285.62

2

6,851,663.84

3

14,882.15

Total

$ 7.461.831.61

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the carrying value ofthe Board's total investments was $55,369,806.34 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to

- 21 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PuRPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds ofthe State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30,1998 was .96 years.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: GENERAL FIXED ASSETS

The follQwing is a summary of changes in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1997 Additions Deletions Unlocated Variance Balance June 30, 1998

Land

Buildings

Eauipment

Total

$ 6,030,715.76 $117,274,307.01 $22,396,121.89 $145,701,144.66

186,821.06 4,577,685.07 1,719,254.84 6,483,760.97

-182,731.78

-182,731.78

-19.231.56

-809.989.74

148.109.84

-681,111.46

$ 6.198.305.26 $121.042,002.34 $24.080,754.79 $151.321.062.39

Note 5: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.
- 22-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: RISK MANAGEMENT

For the 1995 fiscal year, a natural disaster claim (flood damage) filed by the Board exceeded commercial insurance coverage by $26,182,299.32. Federal Emergency Management Agency (FEMA) funds in the amount of$18,055,955.00 have been awarded to the Board through June 30, 1998. The remainder ofthe loss will be absorbed by the Board to the extent they are not funded by subsequent awards from FEMA.

The Board participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994 to develop and administer a plan to reduce risk of loss on account ofgeneral liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The Board pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery, general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment of excess insurance for the system varies by line of coverage.

The Board has established a limited risk management program for workers' compensation claims. A premium

is charged when needed by the Internal Service Fund to each user fund on the basis of the percentage of that

fund's payroll to total payroll in order to cover estimated claims budgeted by manageII1;ent based on known

claims and prior experience. The Board accounts for claims with expense and liability being reported when

it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess

coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the

statutory limit.

.

Changes in the workers' compensation claims liability during the last two fiscal-years are as follows:

1997 1998

Beginning of Year Liability

Claims and Changes in Estimates

$ 212,837.00 $ 404,755.15 $ $ 205,666.99 $ 442,748.17 $

Claims Paid

End ofYear Liability

411,925.16 $ 368,233.49 $

205,666.99 280,181.67

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts f~r claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

- 23 -

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: RISK MANAGEMENT

1997 1998

Beginning of Year Liability

Claims and Changes in Estimates

$

3,282.00 $ 21.209.00 $

$

0.00 $ 21.559.00 $

Claims Paid

End ofYear Liability

24.491.00 $

0.00

21.559.00 $

0.00

The Board has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent All Employees

$ 50,000.00 $ 250,000.00

Note 6: GENERAL LONG-TERM DEBT

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Refunding - Series 1992 General Government - Series 1998

3.25% - 5.20% 3.55% - 4.10%

$ 1,280,000.00 35,000,000.00

$36,280,000.00 The changes in Gen~ral Long-Term Debt during the fiscal year ended June 30, 1998, were as follows: .

General Obligation
Bonds

Balance July 1, 1997

$ 1,650,000.00

Additions

35,000,000.00

Deductions

370,000.00

Balance June 30, 1998

$36.280,000.00

At June 30, 1998, payments due by fiscal year which includes principal and.interest for these items are as follows:

- 24-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30
1999 2000 2001 2002 2003
Total Principal and Interest
Note 7: ON-BEHALFPAYMENTS

General Obligation
Bonds
$ 8,317,252.71 8,278,835.00 8,355,622.50 7,942,712.50 7,988,381.25
$40,882,803.96

The Board has recognized revenues and expenditures in the amount of$I,717,645.17 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$I,421,489.17

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$296,156.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998, together with funding available:

Project
98/97S-647-073 99-647-079 SPLOST Projects Flood Recovery

Unearned Executed Contracts

Funding Available. FromFEMA

$ 37,022.00 32,194.00
787,79463 7,456,045.86

$ 5,482,065.18

$ 8.313,056.49 $ 5.482,065.18

The amounts described in this note are not reflected in the gep.eral purpose financial" statements.

- 25-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 8: SIGNIFICANT COMMITMENTS

Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes

to the General Purpose Financial Statements concerning an entity's computer related year 2000 readiness.

These disclosures, which are necessary to comply with generally accepted accounting principles, have not

been made by the Board.

.

Note 9: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall fmancial position.

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 10: ACCUMULATED EMPLOYEES' LEAVB

The Board's administrative staff and certain other full-time employees earn up to one and one-half days per

month ofvacation leave. Vacation leave may be accumulated to a maximum of 30 days. Employees are paid,

at their current rate ofpay, for unused accumulated vacation leave up to the maximum upon retirement or

termination of employment. See Note 1 - Compensated Absences .

.

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a' separate stand alone fmancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the :rRS Board of Trustees in accordance with State statute and as advised by their independent actuary.' The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 26-

DOUGHERTY COUNTY BOARD OF EDUCATION

EXHIBIT "FI1

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 11: RETIREMENT PLANS
Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 7,136,105.17 $ 7,045,516.37 $ 6,621,098.33

- 27-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Consumable Supplies Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 363,494.30 $

93,545.59

707,672.89

275,011.26

22,461,00

18,888.81
253,451,82 215,048.10

Total Assets

$ 1,833,567.18 $=====11;.;;6=,0=06=,.=59=

Total Liabilities and Fund Equity See notes to the general purpose financial statements.
- 28-

$ 1,833,567.18 $=====11;.;;6:1::,0=06;,;.=59=

EXHIBIT"G"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30,1998 JUNE 30, 1997

$ 457,039.89 $ 931,692.65

707,672.89

$ 1,503,520.58 $

5,000.00

1,805,992.84

1,127,292.77

18,888.81
253,451.82 215,048.10

23,660.65
148,290.11 . 237,477.33

$ 1,503,520.58 $

5,000.00 $ 3,458,094.35 $ 2,468,413.51

$ 187,651.93 $ 199,421.98 772,209.08 239,128.54
$ 1,398,411.53 $

5,000.00 $

192,651.93 $ 290,080.09 1,217,795.38 240,418.03

18,029.53 228,623.92 1,087,993.93 49,178.14

5,000.00 $ 1,940,945.43 $ 1,383,825.52

$

12,504.60

92,604.45 $ $ 105,109.05 $

$

12,504.60 $

54,564.33

18,888.81

23,660.65

253,451.82 215,048.10

148,290.11 237,477.33

0.00

1,017,255.59

620,595.57

0.00 $ 1,517,148.92 $ 1,084,587.99

$ 1,503,520.58 $

5,000.00 $ 3,458,094.35 $ 2,468,413.51

- 29-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Enterprise Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCiNG SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 458,460,00 $ 1,296,865,74 5,605,377.84
1,573,408.34
$ 7,637,246.18 $ 1,296,865.74

$ 1,146,487.27
117,534.49 72,498.43

19,810.54 45,307.25
$ 6,934;339.41 246,953.10 . 6,907.10
$ 7,188,199.61 $ 1,401,637.98
$ 449,046.57 $ -104,772.24

104,772.24

$ 449,046.57 $

0.00

962,993.30

0.00

FUND BALANCE JUNE 30

$ 1,412,039.87 $=====0.=00=

See notes to the general purpose financial statements. - 30-

EXHIBIT"H"

FEDERAL
PROGRAMS

OTHER
PROGRAMS

TOTALS
YEAR ENDED JUNE 30,1998 JUNE 30,1997

$ 1,685,430.32 $ 6,642,645.32
616,814.88
$ 8,944,890.52 $

50,000.00 $ 3,490,756.06 $ 12,248,023.16

10,000.00

2,200,223.22

3,472,940.72 12,568,713.09
9,000.00 2,019,755.74

60,000.00 $ 17,939,002.44 $ 18,070,409.55

$ 5,739,310.51 $
755,588.54 812,380.87
51,307.26 409,431.93
16,545.90
108,134.78 17,938.94
1,114,131.69
$ 9,024,770.42 $
$ -79,879.90 $

81,724.25 $ 6,967,522.03 $ 6,976,213.22

873,123.03 884,879.30
51,307.26 409,431.93
16,545.90
127,945.32 63,246.19
1,114,131.69 6,934,339.41.
246,953.10 6,907.10

697,985.05 1,136,260.99
31,761.82 454,560,86
220.00 5,504.02 178,290.59 49,815.00 904,351,75 7,214,981.91 215,157.12 423,242.14

81,724.25 $ 17,696,332.26 $ 18,288,344.47

-21,724.25 $ 242,670.18 $ -217,934.92

63,394.26

21,724.25

189,890.75

286,060.67

$ -16,485.64 $ 121,594.69

0.00 $ 432,560.93 $

0.00

1,084,587.99

68,125.75 1,016,462.24

$ 105,109.05 $====0=,=00= $ 1,517,148.92 $ 1,084,587.99

- 31 -

pOUGHERTY COUNTY BOARD OF EDUCATION . COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 3D, 1998

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00

$ 1,453,799.68

$ 34,768,188.85

287,486.89

Total Assets

$=======0.0..0.,= $ 34,768,188.85 $==1...,.7..4...1.:5,2=:86=.5;;,,;7=

LIABILITIES AND FUND EQUITY
LIABILITIES
. Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Flood Recovery For Purposes of Bond Issue ForSPLOST For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

547,803.88

$

$

547,803.88 $

155,762.00 155,762.00

$ 34,220,384.97

$ 1,585,524.57

$

0.00

0.00

0.00

$

0.00 $ 34,220,384.97 $ 1,585,524.57

Total Liabilities and Fund Equity

$======0.:=00= $ 34,768,188.85 $==1...,.7..4...1.:5,2=:86=.5;;,,;7=

See notes to the general purpose financial statements.

- 32-

EXHIBIT "I"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

FEDERAL PROJECTS

TOTALS JUNE 30, 1998 JUNE 30,1997

$ 1,453,799.68 $ 2,280,603.84

$ 3,536,149.27

38,304,338.12

2,320,761.36 $ 2,871,976.88

5,480,225.13

1,325,164.16

$ 5,856,910.63 $ 2,871,976.88 $ 45,238,362.93 $ 3,605,768.00

$

1,281.57 $

902,969.37 $ 1,452,054.82 $

36,694.10

3,705.35

58,010.37

1,497,061.15

1,710,833.52

206,606.10

271,326.85

271,326.85

27,055.40

$

59,291.94 $ 2,671,357.37 $ 3,434,215.19 $

274,060.95

$ $ 5,797,618.69
0.00 $ 5,797,618.69 $

200,619.51 $

200,619.51 $ 34,220,384.97
5,797,618.69 1,585,524.57

0.00

0.00

200,619.51 $ 41,804,147.74 $

1,516,561.90
1,810,686.75 4,458.40
3,331,707.05

$ 5,856,910.63 $ 2,871,976.88 $ 45,238,362.93 $ 3,605,768.00

- 33-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30,1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Other Support Services
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from General Obligation Bonds Par Value Premiums on Bonds Sold
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

132,013.39

12,820.50

$

239,475.29

$

669,200.37

$

239,475,29 $

669,200,37 $

144,833.89

$

475,979.00

$

22,319,32

39,593.35

$

7,783.21

244,745.00.

11,600.00

452,963.72

$

306,657-.67 $

487,579.00 $

460,746.93

$

-67,182.38 $

181,621.37 $ -315,913.04

$ 35,000,000.00

325,518.25

$

62,723.98

$

90,750.86

-1,286,754.65

$

62,723.98 $ 34,038,763.60 $

90,750.86

$

-4,458.40 $ 34,220,384.97 $ -225,162.18

4,458.40

0.00

1,810,686.75

FUND BALANCE JUNE 30
See notes to the general purpose financial statements.

$====0.....0=0,= $ 34,220,384.97' $ 1,585,524.57 - 34-

EXHIBIT"J"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

FEDERAL PROJECTS

TOTALS

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$

439,603.57 $

571,616.96 $

405,959.58

3,896,011.66

3,908,832.16

3,702,115.41

$ 6,186,425.62

6,425,900.91

144,079.00

91,514.46

760,714.83

$ 6,277,940.08 $ 4,335,615.23 $ 11,667,064.86 $ 4,252,153.99

$

2,666.70 $

2,666.70 $

20,304.57

$

4,576.00

292,449.77

3,552.40

3.85

147,435.68 7,522.96

627,990.68 292,449.77
25,871.72 54,899.52
3.85

3,741.50 306,150.59
1,918.26 22,043.15

2,016.00 58,010.37

98,620.38 6,833,897.96
21,822.90

. 112,236.38 7,589,617.05
21,822.90

507,147.12 1,649,999.44
60,645.38

$

360,608.39 $ 7,111 ,966.58 $ 8,727,558.57 $ 2,571,950.01

$ 5,917,331.69 $ -2,776,351.35 $ 2,939,506.29 $ 1,680,203.98

$ 35,000,000.00

325,518.25

$ "1,460,408.96

1,613,883.80 $

$ -119,713.00

-1 ,406,467.65

$ -119,713.00 $ 1,460,408.96 $ 35,532,934.40 $

312,459.96 312,459.96

$ 5,797,618.69 $ -1,315,942.39 $ 38,472,440.69 $ 1,992,663.94

0.00

1,516.561.90

3,331,707.05

1,339.043.11

$ 5.797,618.69 $

200,619.51 $ 41,804,147.74 $ 3,331,707.05

- 35-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30,1998

EXHIBIT"K"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

PROPERTY TAXES
FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30,1998

JUNE 30, 1997

$

16,096,33 $

595.22 $

16,691.55 $

26,564.27

598,940.85

3,965,936.46

4,564,877.31

453,289.19

9,874.98

9,874.98

3,881.54

Total Assets

$

624,912.16 $ 3,966,531.68 $ 4,591,443.84 $==4=8.3..=.,7=35:=.0=0,==

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated

$

624,912.16 $

_ _ _ _0=.;.""'00__

3,966,531.68 $ 0,00

4,591,443.84 $ 0,00

483,735.00 0.00

Total Fund Equity

$

624,912.16 $ 3,966,531.68 $ 4,591,443.84 $==4=8..3.=.,7=35:=.0=0,==

,,;;.-.

See. notes to the general purpose financial statements.

- 36-

.i<'-

DOUGHERTY COUNTY BOARD OF EDUCATION

COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

DEBT SERVICE FUND

YEAR ENDED JUNE 30. 1998

EXHIBIT"L"

FUND BALANCE JUNE 30

$

624,912.16 $ 3,966,531.68 $ <4,591.443.84 $==4,;;;;8;,;;3=,7=35=.0=0=

See notes to the general purpose financial statements.

- 37-

DOUGHERTY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30,1998

EXHIBIT"M"

$

0.00 $

76,472.44 $

76,472.44 $ -=======0.=00,,=

LIABILITIES Funds Held for Others

$====0=.0=0,= $

76,472.44 $

76,472.44 $======0.=00=

SCHOOL ACTIVITY FUNDS
ASSETS Cash and Cash Equivalents

$

289,536.72 $ 1,768,225.79 $ 1,635,815.11 $. 421,947.40

LIABILITIES Funds Held for Others

$

289,536.72 $ 1,768,225.79 $ 1,635,815.11 $

421,947.40

TOTALS-AGENCY FUNDS
ASSETS Cash and Cash Equivalents Accounts Receivable

~

$

256,664.08 $ 1,844,698.23 $ 1,679,414.91 $

421,947.40

32,872.64

32,872.64

$

289,536.72 $ 1,844,698.23 $ 1,712,287.55 $=======42=:1=,94;;,,;,,;,,;;7.==40=

LIABILITIES Funds Held for Others

$

289,536.72 $ 1,844,698.23 $ 1,712,287.55 $ ==4;,;;2;,,;,1:,9=47;,,;.4,,;;0=

See notes to the general purpose financial statements.

- 38-

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

SCHEDULE *1*

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U, S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1998 Contract
Total U, S, Department of Agriculture
Corporation on National and Community Service Pass-Through From Georgia Department of Education Georgia Serve America Project 1997 Grant 1998 Grant
Total Corporation on National and Community Service
Education, U, S. Department of Direct Impact Aid 1998 Grant Pass-Through From Chattahoochee Flint Regional Educational Service Agency Elementary and Secondary Education Act TiUe I Migrant Education 1998 Grant Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Suminer 1998 Grant 1998 Summer Title II Eisenhower Professional Development 1997 Grant 1998 Grant TiUeVI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1997 Grant 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Georgia Learning Resources System 1998 Grant

CFDA NUMBER
* 10,553 * 10,555
10.550
10,558
94,004 94,004
84,041
84,011
84,010 84.010 84.010 84.281 84.281 84298
84.276 84,276
84,027 84,173 84,027

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A

$ 1,408,870.13

(2)

N/A

3,577,486,98 $ 6,694,769,01 (3)

N/A

493.430.60

493,430,60

N/A

125,590,13

(2)

$ 5,605.377.84 $ 7.188.199,61

N/A

$

1,195,88 $

N/A

10.000,00

$

11,195,88 $

2,922.42 2.922.42

$

824,713,97

(4)

NlA

1,177.62 $

1,177.62

N/A

99,844,61

151,507.71

N/A

4,366,686,79

4,366,686.79

N/A

299,672,36

298,978,48

N/A

9,478.51

9,478.51

NlA

74,605,00

73,505,55

N/A

139,419,00

139,419.00

N/A

9,783,88

10,069.57

N/A

36,671,20

36,671,20

N/A

754,559,70

754,559,70

N/A

90,650.82

90,650,82

N/A

114,858,58

114,858,58

- 39-

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1998

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Severely Emotionally Disturbed 1998 Grant Part 0 - Special Education Personnel Training and Parent Training 1997 Grant 1998 Grant Safe and Drug-Free Schools 1998 Grant Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant
Total U. S. Department of Education
Federal Emergency Management Agency Pass-Through From Office of the Govemor Disaster Assistance
Health. and Human Services. U. S. Department of Pass-Through From Georgia Department of Human Resources Extended Day Program 1997 Grant
Labor. U. S. Department of Pass-Through From Southwest Georgia Regional Development Center Job Training Partnership Act 96-B-87 1997 Grant 89-B211998 Grant
Total U. S. Department of Labor
OTHER FEDERAL ASSISTANCE
Defense. U. S. Department of Direct Department of the Air Force R.O.T.C. Program 1998 Grant Department of the Marine Corps R.O.T.C. Program 1998 Grant Troops to Teachers 1998 Grant
Total U. S. Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.027
84.029 84.029 84.186 84.196
84.048 84.243
83.516

N/A

$

157.175.29 $

157.175.29

N/A

-102.89

412.65

N/A

4.600.00

4.262.19

N/A

140.567.68

140.567.68

N/A

14,000.00

14.000.00

N/A

236.825.19

279.960.52 (3)

N/A

2,244.82

2.244.82

$ 7.377.432.13 $ 6.646.186.68

NlA

$ 3.908,832.16 $ 7,572.713.51 (3)

93.037

N/A

$

6.657.56 $

6.657.56

17.250 17.250

N/A

$

NlA

$

67.212.40 $ 4.861.32
72.073.72 $

67.212.40 4,861.32
72,073.72

$

32,923.40 $

32,923.40

63.373.34

63.373.34

10,000.00

10,000.00

$

106,296.74 $

106,296.74

Total Federal Financial Assistance N/A=Not Available

- 40-

$ 17.087.866.03 $ 21 ,595.050.24

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998
Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year,
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1998 National School.Lunch Program,
(3) Expenditures for this program include State, and/or Other Funds, Expenditures are not maintained by fund source,
(4) Funds eamed on this program do not require reporting of expenditures.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Dougherty County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the financial statements for the govemmental funds.

SCHEDULE "1"

See notes to the general purpose financial statements.

- 41 -

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30.1998

SCHEDULE "3"

$ 90.476,305.00 $ 125.587.374.02 $ 7.328.815.20 $

0.00

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for each projed. Includes all cost from projed inception to completion.
(3) The voters of Dougherty County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds. statellocal property taxes and/or other funds over the life of the projed.

See notes to the general purpose financial statements.

- 43-

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "4"

EXPENDITURES

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL

TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

Maintenance and Operation of Plant

Student Transportation Services

3,068.87 $

22,403.80 $ 479,361,84 $

641,652.76 $ 1,146,487,27

117,534.49 72,498.43 19,810.54 45,307,25

117,534,49 72,498.43 19,810,54 45,307.25

Total Expenditures

$

3,068,87 $

22.403,80 $ 479,361.84 $

~~8;9:6;,;8;0,3;.4;7:~ $ 1,401,637.98

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 878,827.90
3,068,87
22,403,80 479,361.84
17,975,57

$ 1,401,637,98

See notes to the general purpose financial statements,

-44 -

DOUGHERTY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1998

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

46,099,368.00 $ _ _1:J:,2:;:0.:::.l9,~35:::..:.7..:.:.0:.=...0

$

49,821,045.61

1,935,521.88 $ _ _1:J.:,6:;:5:.:..J7,~63:;:5::..:.1:.=...6

$

51,756,567.49

-483,036.22 $ _---=5:..:.1l.:'2~73;;.:.;,5::;.;:3:..:.1:=.2,;...7

$

0.00 $=====0:;,;;.0==0

See notes to the general purpose financial statements. - 45 -

DOUGHERTY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1998

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs, See notes to the general purpose financial statements.

$

135,833,00

$

135,833.00 $

0.00

332,224.00

332,224.00

$

468,057.00 100 $

468,057,00 $======0,;;;,0:.0

- 46 -

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 3,793,211.10 $ 4,344,996.78 $

86,847.31 $ 4,431,844.09

9,935,236.80

10,990,900.78

333,642.10

11,324,542.88

$ 13,728,447.90 $ 15,335,897.56 $

420,489.41 $ 15,756,386.97 $

0.00

4,120,801.20

5,040,536.82

224,637.51

5,265,174.33

0.00

7,151,517.00

9,756,530.06

405,376.82

10,161,906.88

0.00

4,793,163.30

5,751,774.32

154,484.42

5,906,258.74

0.00

2,028,924.00

2,072,019.87

141,325.38

2,213,345.25

0.00

1,245,171.60

2,137,082.07

138,603.71

2,275,685.78

0.00

$ 33,068,025.00 $ 40,093,840.70 $ 1,484,917.25 $ 41,578,757.95

$ 4,948,577.10 $

189,581.98 $ 2,481,640.95 2,666,545.82
277,501.31 44,on.97

14,970.15 $ 29,941.88 66,705.49 9,941.73 5,512.03

204,552.13 2,511,582.83 2,733,251.31
287,443.04 49,590.00

$ 4,948,5n.10 $ 5,659,348.03 $

127,071.28 $ 5,786,419.31

0.00

732,006.90

884,080.04

21,665.04

905,745.08

0.00

$ 5,680,584.00 $ 6,543,428.07 $

148,736.32 $ 6,692,164.39

$ 1,339,529.40 $ 1,421,635.34 $

23,981.59 $ 1,445,616.93

0.00

$ 40,088,138.40 $ 48,058,904.11 $ 1,657,635.16 $ 49,716,539.27

$ 1,145,659.50 $ 255,633.30
$ 1,401 ,292.80 $

1,762,141.50 $
1.762,141.50 $

$ 277,886.72
2n,886.72 $

1,762,141.50 2n,886.72
2,040,028.22

0.00 '0.00

$ 41,489,431.20 $ 49,821,045.61 $ 1,935.521.88 $ 51;756,567.49 $

0.00

$

135,833.00

332,224.00

$ =====4=68=:.:,0=5=7=.0=0

$

398,528.84 $

398,528.84

58,277.09

58,277.09

$

456,805.93 $

456,805.93 $ =====11,;;;,2=5..1..=.0.7..

47 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Dougherty County Board ofEducation

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Ladies and Gentlemen:

We have audited the financial statements of Dougherty County Board of Education as of and for the year

ended June 30, 1998, and have issued our report thereon dated March 26, 1999. This report was qualified

for various departures from generally accepted accounting principles, as identified in the auditor's report on

the general purpose financial statements. We conducted our audit in accordance with generally accepted

auditing standards and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States.

.

Compliance

As part of obtaining reasonable assurance about whether Dougherty County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its 'compliance with certain provisions of Jaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results ofour tests disclosed an instance ofnoncompliance that is required to be reported under Government Auditing Standards which is described in the accompanying Schedule of Findings and Questioned Costs as item FS6471-98-02.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Dougherty County Board of Education's internal control
over fmancial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial

98YB-60

reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Dougherty County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6471-98-03.
A material weakness is a condition in which the design or operation of one or mpre of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that . are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~...CAL uJ. ~-
Russell W. Hinton State Auditor
RWH:gp 98YB-60

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Dougherty County Board ofEducation
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Dougherty County Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OME) Circular A-133 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Dougherty County Board ofEducation's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofDougherty County Board of Education's management. Our responsibility is to express an opinion on Dougherty County Board of Education's compliance based on our audit. .
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the CoinptrollerGeneral of the United States; and OMB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-l33 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Dougherty County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Dougherty County Board of Education's compliance with those requirements.

98SA-30

In our -opinion, the Dougherty County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major-Federal programs for the year ended June 30, 1998.

Internal Control Over Compliance

The management of Dougherty County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Dougherty County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose ofexpressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.

We noted a certain matter involving the internal control over compliance and its operation that we consider

to be a reportable condition. Reportable conditions involve matters coming to our attention relating to

significant deficiencies in the design or operation of the internal control over compliance that, in our

judgement, could adversely affect the Dougherty County Board of Education's ability to administer a major

Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The

reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item

FA-6471-98-01.

-

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not _ necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered-to be material weaknesses.. However, the reportable condition described above is not considered to. be a material weakness.
This rePort is intended for the information of management, the Federal cogniz~.t agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.

Respectfully submitted,
~~.~~
Russell W. Hinton
State Auditor

RWH:gp 98SA-30

SECTIONID . AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DOUGHERTY COUNTY BOARD OF EDUCATION AUDlTEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6471-93-06 6471-95-02 6471-96-01 6471-96-02 FS-6471-97-01 FS-6471-97-02 FS-6471-97-03 FS-6471-97-04

Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Unresolved -See Corrective Action/Responses Unresolved -See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $53,756.10 Finding Control Number: 6471-96-01

To be resolved by future increase in QBE Local Fair Share.

EMPLOYEE COMPENSATION .Salary Overpayment Amount: $34,114.60 Finding Control Number: 6471-96-02

The overpayment has been turned over to the School system's lawyer and a note for the overpayment was received. $3,000.00 has been repaid on this account.

EXPENDlTURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $29,309.23 Finding Control Number: FS-6471-97-01

To be resolved by future increase in QBE Local Fair Share.

- 1-

SECTION IV FINDINGS AND QUESTIONED COSTS

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Dougherty County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Dougherty County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Dougherty County Board of Education disclosed one instance of noncompliance deemed material to the financial statements. This noncompliance involved the Board's failure to transfer required funds from the General Fund to the Capital Projects Fund.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Dougherty County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement.
Program Income
The reportable condition described above is not considered to be a material weakness.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Dougherty County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .51 OCa) of OMB Circular A-133 - The Dougherty County Board of Education's audit disclosed an audit finding required to be reported by section .51O(a) ofOMB Circular A-133. This audit finding is included in section IV ofthis report.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $540,869.53.
- 1-

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Dougherty County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department ofEducation.
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDlTURESILIABILITIESlDlSBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $11,251.07 Finding Control Number: FS-6471-98-01
The Board had an underexpenditure of Quality Basic Education (QBE) funds of $11 ,251.07 for the Staff Development Programs. The underexpenditure noted above occurred because the Board expended less than the minimum expenditure requirement for this QBE program. These funds should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
GENERAL LEDGER Failure to Transfer Local Matching Funds Material Noncompliance Repeated From Prior Year Finding Control Number: FS-6471-98-02
The Dougherty County Board ofEducation failed to transfer all ofthe required local matching funds from the General Fund to the Capital Projects Fund as required for the approved State Capital Outlay Projects for the 1998 fiscal year. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units ofAdministration (FMGLUA) and the agreement signed by the Board to receive the funding through Georgia State Financing and Investment Commission (GSFIC) require that the Board transfer local matching funds by year end and designate those funds by project name and number. This deficiency occurred due to management disregarding the requirements of 'FMGLUA and the contractual agreement with GSFIC. Correcting audit adjustments were necessary to transfer $669,181.00 from the General Fund to GSFIC Project No. 98/97S-647-073 and to transfer $70,933.84 from the Capital Project SPLOST fund to GSFIC Project No. 99-647-079 as required..
-2-

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6471-98-03

The property records for the Dougherty County Board of Education's general fixed assets were found to be deficient. The detailed subsidiary records at June 30, 1998, were not adequately reconciled to the general ledger. Also, we were unable to reconcile beginning and ending property inventories through an analysis of fiscal year purchases/deletion activity. An unlocated variance of $681,111.46 existed at June 30, 1998 as disclosed in Note 4 to the General Purpose Financial Statements. This condition occurred as a result of management's failure to ensure that proper controls and procedures were maintained for the recording ofitems in the property inventory records and the general ledger.

The Board should correct the unlocated variance noted above and should establish controls to ensure that

fixed asset additions and deletions are reconciled to the general ledger expenditure accounts in accordance

with the Board's policy.

.

ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

PROGRAM INCOME Projected Loss of Supplemental Sales Revenue Reportable Condition U. S. Department of Agriculture Through Georgia Department ofEducation Amount: $40,324.84 Finding Control Number: FA-6471-98-0l

A suspected misappropriation offunds at Monroe High School lunchroom was disclosed by Board personnel and communicated to the audit staff. The lunchroom's sales activity for March 1998 was tested using analytical procedures and the results ofthose procedures were used as a basis and when applied to sales for July 1, 1997 through March 23, 1998, resulted in a suspected loss of $40,324.84 based on projections of supplemental sales for the Food and Nutrition Program - Food Services - National School Lunch Program (CFDA 10.555). The Albany Police Department is currently investigating this matter with the assistance of the Dougherty County District Attorney's office. The Georgia Department of Education should review this matter and determine the amount of funds to be recovered by the School Food Services Fund.

-3-